Bank of Japan Deputy Governor Ryozo Himino has not clearly refuted expectations that interest rate hikes may remain open next month and that the market is heating up. “If the potential inflation rate deviates from the target and rises above the 2% price stability target level, it will have an adverse impact on the economy,” Ryozo Himi said in a speech to local business leaders in Saitama Prefecture on Thursday. “We should pay more attention than ever to the risk of rising prices. Every monetary policy meeting should take these factors into account and conduct in-depth discussions.” Earlier on Thursday, prior to his speech, the overnight index swap showed that the probability of a September rate hike was about 85%. As the Middle East conflict continues, the Bank of Japan is facing increasing inflationary pressure, and the continued weakness of the yen has exacerbated this pressure.

Bank of Japan Deputy Governor Ryozo Himino has not clearly refuted expectations that interest rate hikes may remain open next month and that the market is heating up. “If the potential inflation rate deviates from the target and rises above the 2% price stability target level, it will have an adverse impact on the economy,” Ryozo Himi said in a speech to local business leaders in Saitama Prefecture on Thursday. “We should pay more attention than ever to the risk of rising prices. Every monetary policy meeting should take these factors into account and conduct in-depth discussions.” Earlier on Thursday, prior to his speech, the overnight index swap showed that the probability of a September rate hike was about 85%. As the Middle East conflict continues, the Bank of Japan is facing increasing inflationary pressure, and the continued weakness of the yen has exacerbated this pressure.